Please ensure Javascript is enabled for purposes of website accessibility

Why Plug Power Stock Just Popped

By Rich Smith - Feb 24, 2021 at 1:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Are fuel cell stocks ready to perk back up?

What happened

Plug Power stock was up 3.5% as of 1 p.m. EST Wednesday. The past few weeks have not been kind to investors in the hydrogen fuel cell industry.

From an intraday high of $75.49 hit Jan. 26, shares of Plug Power (PLUG -0.72%) lost more than half their value through the nadir of yesterday's tech stock rout, falling nearly as far as $37 a share before recovering somewhat. Other fuel cell stocks have suffered similar declines: FuelCell Energy (FCEL -0.54%) lost more than half its value in less than two weeks, Bloom Energy (BE 0.45%) nearly half, and Ballard Power Systems (BLDP -2.29%) about 40%.

But in fact, Ballard, while suffering the smallest decline from top to bottom may be the stock set to lead the industry out of its rut.

Origami dollar folded into an arrow pointing up

Image source: Getty Images.

So what

Ballard received twin upgrades yesterday and this morning. First, Canada's TD Securities upgraded Ballard stock to speculative buy, and then National Bank followed with an upgrade to outperform (which also means buy).

National noted that it's upgrading Ballard stock because of the $1.2 billion in cash on its balance sheet, reports today, which will be "important for it to remain competitive and attract future partners." TD noted that the last time it downgraded Ballard, it did so "based entirely on valuation," but Ballard's overvaluation is now significantly lessened.

Now what

What do Ballard's upgrades have to do with Plug Power?

Well, I'll tell you: If Ballard having $1.2 billion in cash is a reason to buy that stock, then what does this imply for Plug, which had $1.4 billion in cash at last report, then raised $1.8 billion in new cash from a stock offering in January and has filed plans to raise $1.5 billion more?

And if Ballard stock looks attractive at a stock price down 40% of a peak, then how much of a bigger bargain might Wall Street find in Plug Power stock, which is down more than 50%?  

These are the kinds of questions investors may be asking about Plug stock today, in response to the upgrades on Ballard. And they may also be asking, if Plug has so much more cash than Ballard, and if Plug stock has gotten cheaper than Ballard, how long can it be before the analysts start upgrading Plug stock as well?

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Plug Power Inc. Stock Quote
Plug Power Inc.
$16.45 (-0.72%) $0.12
FuelCell Energy, Inc. Stock Quote
FuelCell Energy, Inc.
$3.70 (-0.54%) $0.02
Ballard Power Systems Inc. Stock Quote
Ballard Power Systems Inc.
$7.24 (-2.29%) $0.17
Bloom Energy Corporation Stock Quote
Bloom Energy Corporation
$15.64 (0.45%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.